STOCK OPTIONS AND WARRANTS

3 Months Ended

Mar. 31, 2012

The following table summarizes all stock option activity for the three months ended March 31, 2012:

	March 31,
	2012
	Shares		Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2011		19,648,462	$	0.34
Granted		2,744,000		0.37
Exercised		—		—
Forfeited		—		—
Expired		—		—

Outstanding, March 31, 2012		22,392,462	$	0.34

Exercisable at March 31, 2012		22,392,462	$	0.34

The following table summarizes information regarding our outstanding and exercisable options at March 31, 2012:

	Outstanding						Exercisable
Range of Exercise Prices	Number of Option Shares		Weighted- Average Exercise Price		Remaining Weighted- Average Contractual Terms (Years)		Number of Option Shares		Weighted-Average Exercise Price
$0.20 – $0.25		4,000,000	$	0.22		4.5		4,000,000	$	$0.22
$0.26 – $0.30		1,000,000		0.28		4.5		1,000,000		0.28
$0.31 – $0.35		2,578,462		0.33		4.8		2,578,462		0.33
$0.36 – $0.40		14,814,000		0.38		4.7		14,814,000		0.38
		22,392,462	$	0.34		4.5		22,392,462	$	$0.34

In determining the compensation cost of the stock options granted, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used in these calculations are summarized as follows:

	Year Ended December 31, 2011
Expected term of options granted		5 years
Expected volatility range		211 – 229	%
Range of risk-free interest rates		0.81 – 1.80	%
Expected dividend yield		0	%

Stock-based compensation expense associated with stock options issued during the three months ended March 31, 2012, and 2011 was $893,928 and $-0-, respectively.